Apr 14, 2016

Help For 387,000 Disabled People

     From a Treasury Department press release:
The U.S. Department of Education announced today a new process to proactively identify and assist federal student loan borrowers with disabilities who may be eligible for Total and Permanent Disability (TPD) loan discharge. ... The Higher Education Act allows for loan forgiveness for borrowers who are totally and permanently disabled. By proactively identifying and engaging borrowers who may be eligible for TPD loan discharge, the Department is fulfilling its commitment to ensure that borrowers who are totally and permanently disabled have the information needed to take full advantage of the debt relief to which they are entitled....
The Department of Education has been working closely with the Social Security Administration (SSA) to complete a data match to identify federal student loan borrowers who also receive disability payments and have the specific designation of "Medical Improvement Not Expected" (MINE) which, because of a change in Department regulations in 2013, qualifies them for loan forgiveness under the TPD discharge program. This streamlined and more accurate process ensures that eligible borrowers receive loan discharges. Approximately 387,000 borrowers were positively identified in the first set of matches which were conducted in December 2015 and March 2016. In total, these borrowers have a combined loan balance of over $7.7 billion, and roughly 179,000 are currently in default. As required by federal law, over 100,000 of those borrowers with defaulted loans have been certified for the TOP, and are therefore at risk of losing federal tax refunds, and of having their Social Security benefits offset. Today's announcement will ease the process of obtaining forgiveness for these struggling borrowers and ensure they receive this entitlement under the law. Beginning on April 18, 2016, borrowers who were positively identified in the match will receive a customized letter explaining that the borrower is eligible for loan forgiveness and the simple steps needed to receive a discharge. Unlike other borrowers, those identified through the data match will not be required to submit documentation of their eligibility. Instead, they are eligible for a streamlined process by which they simply sign and return the completed application.
     I started calling for this more than a year and a half ago.


Anonymous said...

this needs to exclude people whose alleged disability onset is prior to the date they started school

too many people (I know from firsthand experience, teaching at a for-profit institution) enroll in school primarily for the cost of living loans that are provided with a SECONDARY goal of getting a degree. Many of these are older people and MANY fail to get more than 20-30 credits. While I don't have hard statistics, based on experience of stories my students told me, many were likely "disabled" prior to enrolling or had not worked in many years.

Anonymous said...

What 3:08 states is true, but I disagree with 3:08's recommendation. I've had clients who have taken such loans for the sole purpose of obtaining some type of re-education or re-training grant so that they could keep body and soul together while their disability claim slowly goes through the system. When one is destitute and desperate, he will search for any relief (and don't say there are state welfare benefits available--in my state, one has to have children to get any "welfare").

Anonymous said...

I am on SSDI with no hope of ever returning to the work force, I am 20K in debt for a degree that I was unable to complete due to my disability. I also have, at this time, very good credit. I always knew I could get this dismissed, but would that affect my credit rating? I want to maintain my good credit score. Can anyone advise? Thanks!

Jesica Love said...

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